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City auditors report clean opinion; council weighs switching accounting method to save time and money
Summary
Auditor CLA told the council it issued an unmodified (clean) opinion on the city’s 2025 financial statements and flagged routine controls and documentation improvements. CLA also presented cash-basis reporting as an optional cost-and-time-saving alternative to the city’s current modified-accrual statements.
CLA presented the city’s annual audit and delivered a clean, unmodified opinion on the financial statements, meaning the auditor found no material misstatements in the transactions they tested. "You did get an unmodified or clean opinion on the financial statements," the auditor told the council.
The firm walked the council through internal-control observations and a handful of audit adjustments. The auditors noted segregation-of-duties risk common in small cities — one staff member can have access to a full transaction cycle — and recommended process changes and better documentation for employee census records and procurement files. The auditor said one procurement file lacked retained quotes for a project in the $25,000–$175,000 range and recommended retention improvements.
CLA also presented reporting options: the city can continue with modified-accrual, full-accrual statements or, where allowed, use a simpler cash-basis reporting method. The auditor said switching could reduce audit time and cost for a small city. "I think from this process perspective, it would have a significant savings in time and, kind of funds in general," the auditor said. The council discussed trade-offs: cash basis can reduce complexity and cost but may create difficulties if the city later takes a PFA or USDA loan that requires accrual statements.
Council members asked for a decision timeline and additional cost estimates. Staff and auditors suggested targeting a decision by the end of the calendar year to avoid running two different statement types in the same fiscal year and to minimize conversion work at year end.
